Reference no: EM131675597

Question: Margaret Miller operated an H&R Block taxpreparation franchise for 15 years. She hired William Hehlen as an income tax return preparer for fi ve years, from 1997 to 2001. Each year, Miller and Hehlen signed an employment agreement drawn up by H&R Block. The 2001 agreement was between Hehlen and "Margaret Miller, doing business as H&R Block," and included stipulations prohibiting Hehlen from reproducing confi dential business information and from soliciting clients away from Miller's business. Hehlen maintained on his home computer a spreadsheet of customer names that he obtained from Miller. In April 2001, H&R Block terminated its franchise agreement with Miller, and Miller subsequently operated her business as a sole proprietorship under the name of MJM & Associates. Hehlen's employment with Miller ended after the 2001 tax season.

In December 2001, Miller sent advertising postcards to clients referring to Hehlen as one of her associates. When Hehlen, who went to work for another H&R Block offi ce, learned of the postcards, he began telephoning the customers whose names he had obtained from Miller. Miller learned of the calls in February 2002 and fi led a cease-and-desist action against Hehlen, arguing that Hehlen was violating his employment contract with Miller. Hehlen argued that his employment contract was with Miller's H&R Block franchise, which ceased to exist after April 2001. Do you think Hehlen's employment contract was signed with Miller's franchise or with Miller's sole proprietorship? If you think Hehlen's contract was with Miller's franchise, should Miller have the right to enforce the contract provisions after H&R Block terminated her franchise agreement? Why or why not?